| May 17, 2005: May 9th brought the unexpected conviction of a gaggle of
prominent Philadelphia pay-to-players with ties to the
administration of Mayor John Street. The end result of
indictments delivered in 2004, when more than a dozen people
were charged. Since then, several of the indicted dropped out
via guilty pleas. Those just convicted (though not of all
charges) include former Philadelphia city treasurer Corey Kemp,
Glenn Holck, president of Commerce Bank/Pennsylvania and Stephen
Umbrell, Commerce's regional vice president. Along with a few
supporting actors. A key player was struck from the roster last
November when death by natural causes claimed bond lawyer Ronald
A. White. A former member of the Commerce Bank/Pennsylvania
advisory board and top fund-raiser for Mayor John Street.
With White out of the picture many thought conviction of the
other defendants unlikely. Some believed the prosecution's
case was weak or that Mayor Street, as personified by those
connected to him, was invulnerable. An attitude typical
to corrupt cultures. Which is how government in Philadelphia
has often been characterized. Now-- and in the past.
The Philadelphia Story rises above the usual tale of municipal
pols on a greed binge for a number of reasons. First,
Philadelphia is the fifth largest city in the nation. Second,
there's the matter of Commerce Bank. At present, the U.S.
Securities and Exchange Commission (SEC) is investigating whether
Commerce's mother ship, Commerce Bancorp, has made a practice
of donating to public officials in both Pennsylvania and New
Jersey in hopes of obtaining government contracts. Third,
the impact of the recent convictions is being felt outside of
Pennsylvania and familiar faces in far flung places have surfaced
in connection to the overall case. Finally, Mayor John Street
is black and charges of racism re investigations into his
administration have been raised repeatedly.
The Philly essentials are this: bond lawyer, bank board advisor,
and fund raiser Ron White bought himself a city treasurer: i.e.
Corey Kemp. In exchange for cash and assorted percs, which he
sometimes arranged through third parties, White got to direct
Kemp in selecting providers for city financial transactions.
One of the providers who reaped the benefits of the White/Kemp
alliance was Commerce Bank. Commerce Bank president Glenn Holck
and regional vice president Stephen Umbrell, knowing White pulled
Kemp's strings, showered gratuities on both men. Again, sometimes
through third parties. Treasurer Kemp told Ron White what city
deals were coming up and how to score: White in turn, instructed
Holck and Umbrell. Via this arrangement, Commerce became credit
line provider for the Redevelopment Authority of Philadelphia.
Among the gifts Kemp received from Holck and Umbrell was 100
percent financing on his $250,000 home. City treasurer Kemp was
a "poor credit risk". He wouldn't have qualified for the mortgage
without the boost. Kemp's relatives also received extra
consideration with Commerce loans. As did the St. James Chapel
Church, Church of God in Christ. Where Kemp once worshipped and
the Reverend Francis McCracken tended the flock.
In late 2004 Reverend McCracken pled guilty to assorted charges.
Admitting that between 2001 and 2003 he and Corey Kemp defrauded
a state and federally funded welfare-to-work program operated by
the St. James Community Development Corporation by siphoning
off money through dummy business entities. The Church of God
in Christ also received a $116,000 advance on a $480,000
construction loan from Commerce. Not only was the amount needed
for construction inflated by false statements, but Kemp and
McCracken immediately skimmed half off the advance via dummy
companies. Then laundered the money through a series of bank
accounts. Kemp and McCracken were in the process of figuring
out how to use more of the loan for a personal investment in
a racetrack/casino at the Philadelphia Naval Yard (a project
recommended by Ronald White) when indictments descended.
Not all who realized the Kemp/White connection were locals. Take
La-Van Hawkins of Detroit, Michigan. Hawkins, a former Pizza Hut
and Burger King franchisee, now co-owns an upscale establishment
in the Greektown section of Detroit. According to a business
article in the 05/10/05 Detroit News, in 2000 Hawkins sued the
King for fraud and breach of contract. And in 2001 received a
settlement of $30 million. In 2004 Hawkins was indicted in
Philadelphia along with White, Kemp et al. Court statements by
the feds re Hawkins raised the issue of whether an agreement
with Burger King had actually been reached, or if litigation
was ongoing. The feds also described Hawkins as being heavily
in debt. And that he joined those who at the behest of Ron White,
were laying gifts on Philadelphia city treasurer Corey Kemp.
In return, Kemp and Ron White helped Hawkins deceive a company
called Falcon Holdings, a franchiser running one hundred Church's
Fried Chicken outlets in Detroit and Chicago. Hawkins allegedly
claimed he had access to Philadelphia's pension fund-- which
would be available for co-investment in Church's Fried Chicken
franchises as part of a redevelopment effort in North Philly.
Kemp and White allegedly backed up Hawkins' story at a May 2003
meeting with the owner of Falcon Holdings at the Waldorf Astoria
in New York City.
On May 9th, La-Van Hawkins was acquitted re the chicken franchise
conspiracy, but was found guilty of lying to a grand jury as
to why he sent several checks to city treasurer Corey Kemp.
Out-of-town players also included Wall Street types such as
Charles LeCroy, former managing director of the southeast
regional office of J. P. Morgan and Anthony Snell, a former J. P.
Morgan vice president. LeCroy and Snell hailed from Florida and
Georgia respectively. Both pled guilty to billing J. P. Morgan
for $50,000 worth of non existent legal work by Ronald White. In
exchange for his influence in obtaining city business for J. P.
Morgan. Business that was also beneficial to LeCroy and Snell.
Meanwhile, Back At The Ranch
By 2003 Ron White's law firm, with the assistance of Corey Kemp,
had earned $1.6 million from various city of Philadelphia
agencies, with White receiving more than half a million dollars
in consulting fees from the city in regard to bond issues. Some
of the money paid White's firm was for genuine legal work. Still,
there was so much crooked back scratching between Corey and White
that Philadelphia was in danger of becoming the city that itched
itself to death. As Corey Kemp told Ronald White on an FBI tape:
"You got your boy sitting in the treasurer's seat..." and
"that's what we do, man, we take care of each other."
Mayor John Street's role in Philadelphia municipal corruption
is open to debate. No charges against him have been filed. At
best he seems blind to corruption as practiced in the highest
circles of his administration and among his closest political
allies. The tangles described above are only a few of the
scandals that have erupted in Philadelphia involving major city
agencies and allegations of graft, extortion and fraud. And among
the many FBI recorded conversations that factored into the
White/Kemp/Holck/Umbrell case were several where Street's top
campaign fundraiser Ronald White, told Corey Kemp their deals
depended on "John" remaining in office. When companies wanted
to do business with the city of Philadelphia Ron White made it
clear the cost of admission was contributions to Mayor Street.
Did fundraiser Ron White's arm twisting spring from ideological
commitment or loyalty to a political leader? Not half. Consider
the following comments White made in a September, 2003
conversation with another fundraiser: "...the whole thing, man,
you know I don't care about none of this s---, man, none of this
politics s--- means nothing to me. What we want to do is, we
business people, we want to protect our f---ing investment."
Go Team
Commerce Bank is based in the southern part of New Jersey. In
Cherry Hill, a suburban town near the city of Camden, across the
Delaware River from Philadelphia. Commerce is one of the fastest
growing banks in New Jersey and Pennsylvania and has aggressively
pursued public finance work in myriad locales. In 1999 Commerce
and its officers began contributing heavily in Pennsylvania
political circles. John Street's first mayoral run was the
largest recipient. After Street became mayor Commerce was added
to the city of Philadelphia's banking roster, receiving $233
million in city deposits. Its municipal bond subsidiary, Commerce
Capital Markets, which till then was a minor Philly player became
the city's second largest underwriter.
In New Jersey, between 1998 and 2003, Commerce Bank made more
than $1.8 million in political donations. Former Governor Jim
McGreevey received a big piece of that pie in his election run
of 2001. McGreevey's top campaign fund raiser, Robert Feldman,
was a business partner of Ronald White, advisory board member at
Commerce Bank/Philadelphia. After McGreevey was elected, Ronald
White popped up as consultant to the University of Medicine
and Dentistry of New Jersey (UMDNJ). A state university. The
appointment wasn't approved by the school board of directors,
only by the administration. White's firm (International Brokerage
Concepts, Inc.) was apparently hired to represent the university
"during the transition of Governor-elect Jim McGreevey." White
received $75,000. As of early Spring of this year UMDNJ was
unable to find any records of work done by White.
According to an 05/10/05 Newark Star Ledger story (Philly
corruption verdict rattles Jersey landscape) Charles LeCroy of
Florida was also on hand post the 2001 McGreevey election. LeCroy
was the J. P. Morgan guy who back in Philly, presented dummy
invoices to the company for legal work not done by Ron White. In
Jersey, LeCroy was trying to round up government jobs for J. P.
Morgan from the new governor. But found pickings slim because
White's "team" had gotten there first. According to a business
memo by LeCroy, the team included White's partner Robert
Feldman and former New Jersey state Senator John Lynch. One of
McGreevey's main mentors and a top political boss in Jersey.
Speaking of such, LeCroy also mentioned he hadn't been able to
win a tobacco financing deal for J. P. Morgan-- Commerce Bank had
beat them to it. Thanks to the efforts of George Norcross III.
Like Commerce Bank, Norcross the third hails from Cherry Hill
and though he's never held elected office is also a top political
boss. Possibly a tip top boss. Chief executive officer of
Commerce National Insurance Services to boot. Plus a hefty holder
of Commerce stock. Charles LeCroy, speaking via his memo, said
Norcross had "apparently steamrolled the administration on this
one..." and "Ron [White] indicated that this deal was cooked..."
The above emerged during the Philadelphia trial of city treasurer
Corey Kemp, Commerce execs Glenn Holck and Stephen Umbrell etc.
New Jersey state officials deny the allegations. And no doubt
resent the alligator. Also brought up during the trial was that
the McGreevey administration had granted over 4 million dollars
worth of no-bid work to the Investment Management Advisory Group
of Pottsdown, Pennsylvania. A firm which at the behest of Ron
White had contributed to the Corey Kemp Gift Club.
After the brouhaha in Philly erupted, Commerce Bank suspended
its Political Action Committee and said Commerce would no longer
seek no-bid public finance work. Commerce Bancorp announced the
capital markets division wouldn't be pursuing municipal bond
underwriting business. But the SEC probe of Commerce Bank
political donation activities in Pennsylvania and Jersey is
still open. Many stock analysts believe the guilty verdicts of
Commerce execs Holck and Umbrell will mean an investigatory
uptick. However, in January of this year the Federal Home Loan
Bank of New York announced it will help subsidize an affordable
housing development project in the city of Camden-- one also
financed by Commerce Bank/North in Cherry Hill. So
confidence in Commerce by government-mandated institutions seems to be holding up.
The Plots Thicken
News first broke of a federal investigation involving the
administration of Mayor John Street in early October 2003. City
cops, when making a routine security sweep of Street's City Hall
office found listening devices. The bugs belonged to the FBI. All
hell broke loose. Philadelphia was in the middle of a bitterly
contested mayoral race and charges flew that Street's opponent,
white Republican Sam Katz, was being aided by the Bush Justice
Department in an effort to smear and embarrass Street. Some
claimed this was just another example of an overall effort to
knock black elected officials out of office. While others said
that even if the investigation sprang from actual municipal
corruption, black pols were due their turn at the trough white
ones had hogged for years.
Philadelphia has its history of racism and of black people being
excluded from political power. And the administration of Mayor
John Street certainly didn't usher public corruption into Philly.
Think Mayor Frank Rizzo. Think Abscam. But while suspicions
by some Street supporters that the bugs were part of a racist
conspiracy to cheat Street of re-election may be understandable,
they weren't the truth of the matter. Yet they were trumpeted by
local pols who knew better-- and by prominent politicians from
other parts of the country who visited Philadelphia to boost
Mayor Street's re-election.
The bugs in Mayor Street's office arrived there via a federal
probe of a major drug ring. The Philadelphia/Camden region is at
the center of one of the busiest illegal drug transit routes in
the USA. Partly because the Port of Philadelphia/Camden is the
second largest seaport in the nation. The Philly investigation
began before 2003. Twenty six alleged members of a ring believed
to involve hundreds of people were ultimately busted in February
2005. During the drug investigation references to Imam Shamsud-
din Ali, a city contractor and long time supporter of Mayor
Street showed up on wiretaps. As did the voice of Ali himself and
conversations between Ali and Street.
Imam Shamsud-din Ali (born Clarence Fowler) heads 3 business in
Philadelphia. A debt collection service, a mosque connected adult
education school and a minority partnering firm. At one time or
another all received contracts from the city of Philadelphia. In
wiretaps the FBI allegedly picked up drug dealers talking about
payments called a "street tax" which was made to the Philadelphia
Masjid, the mosque headed by Shamsud-din Ali. Who dealers called
"Cutty". Though not indicted on any drug related charges Ali is
currently standing trial for 48 RICO counts. Ones alleging that in
concert with a Special Assistant to the Chief of Staff for Mayor
Street, and a Chief of Staff for a City Councilperson, Ali
extorted kickbacks from city vendors by claiming political
influence. And that he defrauded the city, banks and taxpayers
through a variety of frauds related to his businesses. Ali has
already pled guilty to four counts of tax evasion connected to
charges of siphoning money from the Masjid's religious school.
Based on the pre 2003 drug ring wiretaps containing references to
Shamsud din-Ali, plus his and Mayor Street's voice, the bugs
travelled to the City Hall office phone. Where they hung out for
months and picked up some of the chat which eventually led to the
corruption indictments of Ron White, Corey Kemp and the Commerce
Bank boys. In turn, the material from the City Hall phone taps
contributed to the FBI receiving limited approval from a federal
judge to listen to conversations in Street's actual City Hall
office. But only conversations between certain parties. In
October 2003, those bugs had been in place for just a few days
when city cops, in a sweep of Street's office, discovered them.
Federal investigations move slowly. Even if the bugs hadn't been
found, there was no way anything heard in Street's office could
have been used in time to affect the November 2003 election. The
indictments of White, Kemp and crew weren't handed down until
Summer of 2004. Shamsud-din Ali was indicted later that year.
Furthermore, until the bugs in city hall were discovered Mayor
Street had been running neck and neck with Sam Katz. But a month
later Street mopped the floor with Katz. If anything, suspicions
of a federal "conspiracy" united black and white voters and
helped keep Street in office. Philadelphia is obviously not as
racist as some would paint it.
As to the suggestion that black politicians deserve their chance
at the corruption trough not only is this a morally bankrupt and
profoundly anti democratic position, but it ignores the fact that
black taxpayers are among those who help fill that trough. And
that black urban dwellers in particular deserve good government.
Precisely because they so often didn't-- and don't-- receive it
from the municipal administrations of white John Streets.
Whenever corruption investigations arise the impacted parties,
no matter their race or party affiliation, almost invariably
blame a conspiracy by opponents. Usually in league with the evil
newsmedia. In turn, pols love it when rivals are charged with
being dirty-- and beat the outrage drum loudly in whatever
newsmedia will carry the message. Even if their own closet is
filled with the same practices. But the corruption unearthed is
usually for real, even if the passion for reform on the other
side isn't. Furthermore, for every investigation that gets
launched due to politics there are far more that don't for the
very same reason. The rot left to fester does far more damage.
Think New York
A bit of scrapple from The Apple. With a little Philly dog. One
more odd twist in The Philadelphia Story took place this April
when the name of New York's own Reverend Al Sharpton came up in
a Philadelphia Inquirer article about Detroit restauranteur La-
Van Hawkins and the late Ronald White. Seems that in early 2003,
Hawkins and White agreed to help raise money for Reverend
Sharpton's 2004 NYC mayoral campaign. In return, Hawkins and
White wanted Sharpton to help get them a meeting with the New
York City Comptroller's office. Which oversees the city's pension
fund. Apparently Hawkins and White hoped the pension fund would
invest in one of their projects. Though the meeting took place
no investment resulted. Possibly because New York already has
plenty of chicken. The Philly Inquirer article also said that
the FBI in NYC was looking into questions re Al Sharpton's 2004
campaign funding.
A day or so after this story appeared Reverend Al appeared on
the O'Reilly Factor on Fox Television. Those who expected a
battle of the mega-demagogues were in for a surprise. Sharpton
and Bill O'Reilly hit it off well. O'Reilly seemed truly
simpatico when Al Sharpton complained about unnamed sources with
hidden agendas who spread leaks. And lauded Sharpton for his
wisdom in coming on the O'Reilly show and meeting "these things
head on". To avoid being "demonized by the press". Nor did
O'Reilly roll out the no-spin zone when Sharpton said in his
best, heavily significant manner: "The other thing that is
interesting is the investigation in Philadelphia, they put
a bug in Mayor Street's office."
Carola Von Hoffmannstahl-Solomonoff
"For my own part, I was struck by the extent of the corruption."
Juror in the Philadelphia Kemp/Holck/Umbrell trial. Judge
Suggests New Corruption, Ethics Law. David B. Caruso, Associated
Press, 05/11/05
"Don't worry, the grand jury is still handing out indictments."
Jonah, poster at Attytood, 05/06/05
Sources used in this article include The Philadelphia Inquirer,
Philadelphia Daily News, Philadelphia Independent, Philadelphia
City Paper, Philly Burbs.com, News Gleaner, Pittsburgh Post-
Gazette, Crime Beat/Paul Davis/Orchard Press Mysteries, Newark
Star Ledger, Courier-Post, Detroit Free Press, The Detroit News,
The New York Times, TheStreet.com, AllMortgageDetail.com,
MSN.com, Reuters, Associated Press, 2005 Press Release/Federal
Home Loan Bank of New York, Press Releases U.S. Department of
Justice, Online records of proceedings in the United States
District Court for the Eastern District of Pennsylvania,
Camden/Philadelphia 2005 HIDTA statement/Office of National Drug
Control Policy, plus several of the lively informative blogs
thriving in Philly. Including but not limited to Attytood, Young
Philly Politics and Roxborough's Publius.
|
